Question

While the Robinson-Patman Act makes price discrimination illegal, it does allow some price differences based on which two of the following? (Check all that apply.)

Answer 1

Market forces can incentivize businesses to act in a less discriminatory fashion, such as when it affects their profits or their ability to attract skilled workers.

Step-by-step explanation:

In a competitive market, market forces can give a business an incentive to act in a less discriminatory fashion in several situations:

1. If a business is located in an area with a large minority population and refuses to sell to minorities, it will cut into its own profits. Discriminating against potential customers based on their race or ethnicity would result in missed sales opportunities, leading to financial losses for the business.
2. If a business refuses to pay women or minorities their fair wages based on their productivity, other profit-seeking employers can take advantage of this opportunity. They can hire these skilled workers who are undervalued by the discriminatory employer, leading to an increased demand for their services.
3. In the case of biased owners who want to pay lower wages to Hispanic workers than to other employees, market forces can work against them. The threat of losing productive workers can make the business reconsider their discriminatory practices. Employees who feel undervalued or discriminated against may look for employment elsewhere, resulting in a loss of skilled workers for the biased owner.